David Leonhardt's Latest

https://www.futureofcapitalism.com/2010/04/david-leonhardts-latest

David Leonhardt has a column in the New York Times arguing that the commonlycited statistic that 47% of households will owe no federal income tax relies on "a cleverly selective reading of the facts." His column, which calls for increased taxes, mainly on upper income individuals, is also a selective reading of the facts, though.

Mr. Leonhardt offers up the example of a hypothetical middle class household whose total federal income tax rate was just 3%. "The picture starts to change when you look not just at income taxes but at all taxes. This average household would have paid 0.8 percent of its income in corporate taxes (through the stocks it owned), 0.9 percent in gas and other federal excise taxes, and 9.5 percent in payroll taxes. Add these up, and the family's total federal tax rate was 14.2 percent," he writes. Well, kudos to Mr. Leonhardt for conceding that the corporate income tax is actually a tax on stock-owning middle-class individuals, the "firefighters, preschool teachers, computer support specialists, farmers, members of the clergy, mail carriers, secretaries and truck drivers" he says make up the middle class group he is writing about.

But he credits the corporate income tax paid by middle-class individuals through their stock holdings as part of their federal income tax without making the same adjustments to the tax burden of the top 10%, which owns even more of the stock and, through it, pays more of the corporate income tax.

Mr. Leonhardt claims it's not true "that the wealthy face a much higher tax burden than they once did." But he doesn't reckon with this striking graph from the Tax Foundation showing that over the 20 years from 1987 to 2007, the share of federal individual income taxes paid by the top 1% of taxpayers rose to more than 40% from 25%, while the share paid by the bottom 95% fell to below 40% from above 55%, so that in 2007 the top 1% of taxpayers paid more federal individual income tax than the bottom 95%.

Journalistic reputation-maker Mike Allen wrote that Mr. Leonhardt was a "glaring omission from the winners' list" when the Pulitzer prizes were announced this week, which I took to read that Mr. Allen thought Mr. Leonhardt deserved to win.